Correlation Between BHI and Kumho Petro
Can any of the company-specific risk be diversified away by investing in both BHI and Kumho Petro at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining BHI and Kumho Petro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BHI Co and Kumho Petro Chemical, you can compare the effects of market volatilities on BHI and Kumho Petro and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in BHI with a short position of Kumho Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHI and Kumho Petro.
Diversification Opportunities for BHI and Kumho Petro
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BHI and Kumho is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding BHI Co and Kumho Petro Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Petro Chemical and BHI is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on BHI Co are associated (or correlated) with Kumho Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Petro Chemical has no effect on the direction of BHI i.e., BHI and Kumho Petro go up and down completely randomly.
Pair Corralation between BHI and Kumho Petro
Assuming the 90 days trading horizon BHI Co is expected to generate 1.57 times more return on investment than Kumho Petro. However, BHI is 1.57 times more volatile than Kumho Petro Chemical. It trades about 0.45 of its potential returns per unit of risk. Kumho Petro Chemical is currently generating about 0.24 per unit of risk. If you would invest 1,544,000 in BHI Co on October 30, 2024 and sell it today you would earn a total of 806,000 from holding BHI Co or generate 52.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BHI Co vs. Kumho Petro Chemical
Performance |
| Timeline |
| BHI Co |
| Kumho Petro Chemical |
BHI and Kumho Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BHI and Kumho Petro
The main advantage of trading using opposite BHI and Kumho Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHI position performs unexpectedly, Kumho Petro can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kumho Petro will offset losses from the drop in Kumho Petro's long position.| BHI vs. Spolytech Co | BHI vs. Lion Chemtech Co | BHI vs. Ssangyong Information Communication | BHI vs. Digital Power Communications |
| Kumho Petro vs. KB Financial Group | Kumho Petro vs. Shinhan Financial Group | Kumho Petro vs. Hana Financial | Kumho Petro vs. Woori Financial Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Commodity Directory Find actively traded commodities issued by global exchanges |